Economics covers a broad range of ideas involving the analysis of the production and the consumption of goods in a particular area. It can be divided into microeconomics and macroeconomics. If you are interested in learning more about economics, then you have definitely come to the right place.
Microeconomics: Microeconomics is the category of economics that refers to the economics of a small level within the country, such as a family, group, or community. When studying microeconomics, you look at the savings rate of the consumers, the debt load, the decisions made that are based on certain benefits, and much more. Most of the microeconomics can be analyzed by the benefit-cost ratio.
Macroeconomics: Macroeconomics is the category of economics that refers to the economics of a large level, specifically an entire country or region. The topics studied in macroeconomics include changes in interest rates, inflation, labor pool, unemployment rates, importing and exporting, national income, and much more. This is the category that actually looks at the economic performance of the entire country.
Key Terms to Understand
- Business Cycle: A business cycle is a fluctuation that is seen in certain economic activities. This cycle is usually not something that can be predicted, and it occurs randomly. There are phases of this cycle, including contraction, trough, expansion, and a peak.
- Recession: A recession happens when economic activities drop. This is considered a contraction in the business cycle. There are a lot of factors that can help to determine if the economy is currently in recession. These factors include inflation, unemployment, income levels, spending, and many others.
- Economic Efficiency: Economic efficiency basically means that items are produced at the lowest cost without jeopardizing the safety of the products.
- Technological Efficiency: Technological efficiency basically means that the output of a particular process is able to be increased without an increase in input.
- Opportunity Cost: Opportunity cost refers to an action or an activity that was used as an alternative to a particular action or activity.
This is just a small lesson on economics. There is much more to learn, but definitely too much to be covered in a simple posting.